Cressey's Fraud Triangle

Cressey’s Fraud Triangle states that three elements must be present at the same time for an ordinary individual to commit occupational fraud. These elements are: 

1. Pressure
2. Rationalisation
3. Opportunity

(Albrecht, 2014).

The model addresses both the Differential Association Theory and the General Stain Theory, which respectively explains why fraud occurs by groups within an organisation and why individuals turn to fraud, bribery and corruption (Akkeren, 2015). From my experience of studying fraud, criminal behaviour is learned, not inherited, and can occur individually through the interaction with other people or arise in intimate personal groups.

Perspectives on Deviance: Explanation on Differential Association and Strain Theory

A few years ago, one of the chefs in my parent’s family restaurant started having problems with his spouse and began to arrive to work in a short-tempered mood. One day, he demanded an increase in wages and if declined, all chefs would quit on the day. With no other options, my parents were ‘bullied’ into paying these wages until they were able to hire new chefs. Using Cressey’s model, I can see that it began on the chef’s internal pressures at home, which he used to rationalise his reasons for deserving higher pay and then unfortunately the opportunity existed when the other chefs agreed to go with the plan.

The increase in fraud can be due to the rise of internal and external pressures of individuals where they turn to occupational fraud as a solution to financial problems (Akkeren, 2015). It is recommended for organisations to apply internal controls as well as notice the “red flags” of a fraudster by detecting unusual behaviour of employees, including those in senior level management, and if they are under any financial distress (Bierstaker, 2009, p. 247).

References:

Akkeren, J. V. AYB115 Governance, Fraud and Investigation: Identifying and Profiling Fraudsters [Lecture Notes]. Retrieved from https://blackboard.qut.edu.au/webapps/blackboard/content/listContent.jsp?course_id=_116816_1&content_id=_5376704_1&mode=reset

Albrecht, W. S. (2014). Iconic Fraud Triangle endures: Metaphor diagram helps everybody understand fraud. Fraud Magazine. Retrieved from http://www.fraud-magazine.com/article.aspx?id=4294983342

Bierstaker, J. L. (2009). Differences in attitudes about fraud and corruption across cultures: theory, examples and recommendations. Cross Cultural Management, 16, 241 – 250. doi: 10.1108/13527600910977337